E. Muriu Kamau & another v National Bank of Kenya Limited [2009] KECA 111 (KLR)
The bottom line
#Kenya's Court of Appeal halted collection of a Kshs.27 million judgment against a law firm, ruling the sum could cause severe hardship pending appeal.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the intended appeal is arguable
- 2.Whether the intended appeal, if successful, would be rendered nugatory should a stay be refused
- 3.Whether payment of the decretal sum of approximately Kshs.27 million would cause the applicant law firm severe hardship, having regard to the Oraro & Rachier principle and the overriding objective
Key legal issues
#Arguability of the intended appeal
The grounds in the draft memorandum of appeal were not frivolous, satisfying the arguability threshold.
The court applied the twin well-known Rule 5(2)(b) tests. It reviewed the draft memorandum of appeal and found the grounds raised were not frivolous, which is the low threshold for arguability, without needing to decide whether the appeal would ultimately succeed.
Nugatory value / hardship from a money decree against a law firm
Kshs.27 million was capable of causing severe hardship to the applicant law firm; the Oraro & Rachier principle applies and the balance of convenience favours the applicant.
The court weighed the decretal sum against the scale of operations of law firms generally, held that certainty and treating like cases alike required it to follow Oraro & Rachier, and declined the respondent's invitation to depart from that precedent despite counsel's argument that it created a special class of debtors.
Role of the overriding objective in stay applications
The overriding objective provisions in sections 1A and 1B of the Civil Procedure Act and sections 3A and 3B of the Appellate Jurisdiction Act inform the exercise of the court's discretion on stay.
The court noted the provisions came into force on 23rd July 2009 and require courts to act justly, apply proportionality, and ensure equality of arms. It held that balancing the competing claims as it had done satisfied the principal aims of the overriding objective.
Legal principles established
#- A substantial decretal sum, measured against the operations of a law firm, can constitute severe hardship sufficient to justify stay under Rule 5(2)(b), consistent with Oraro & Rachier.
- In exercising powers under the Court of Appeal Rules, courts must take into account the overriding objective, including acting justly, proportionality and equality of arms.
Court orders
#- 1.An order of stay of execution of the judgment and decree of the High Court (Warsame, J) dated 13th May 2009 in H.C.C.C. No. 539 of 2004 in terms of prayer (ii) of the application, pending the hearing and determination of the intended appeal
- 2.The costs of the application to be costs in the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- High Court of Kenya at Nairobi, Milimani Commercial Courts
- H.C.C.C. No. 539 of 2004
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules
Relief refused
#Respondent's invitation to depart from the principle in Oraro & Rachier Advocates v Cooperative Bank of Kenya Ltd
The court valued certainty and treating like cases alike and declined to overrule or depart from that precedent
Costs
The costs of the application be costs in the appeal.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The upshot is that we grant an order of stay in terms of prayer (ii) of the application and further order that the costs of the application be costs in the appeal. It is so ordered.
One of the cherished virtues of law is certainty and treating like cases alike and for this reason we reject the invitation to depart from the principle enunciated in the Oraro & Rachier case.
We think that in the prevailing circumstances, a payment of Kshs.27 million has the potential of causing severe hardship on the applicant and for this reason the balance of convenience tilts in the applicants' favour.
The courts including this Court in interpreting the Civil Procedure Act or the Appellate Jurisdiction Act or exercising any power must take into consideration the overriding objective as defined in the two Acts.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "E. Muriu Kamau & another v National Bank of Kenya Limited [2009] KECA 111 (KLR)", Case Analysis (2009). Civil Appli 258 of 2009 (UR 180/2009). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/111/eng@2009-10-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.